Strangle

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Related to strangles: Puppy Strangles

Strangle

Buying or selling an out-of-the-money put option and call option on the same underlying instrument, with the same expiration. Profits are made only if there is a drastic change in the underlying instrument's price.

Strangle Strategy

An option strategy in which one buys two out-of-the-money options (usually one call and one put) on the same asset at different strike prices. One profits from a strangle position when there is a large price movement on the underlying asset, regardless of the direction. This is because one of the options will become in the money, so long as the price moves in one direction or the other. Loss only occurs if the price of the underlying asset remains largely the same.

Strangle.

A strangle is a hedging strategy in which you buy or sell a put and a call option on the same underlying instrument with the same expiration date but at different strike prices that are equally out-of-the-money.

That is, the strike price for a put is above the current market price of the stock, stock index, or other product, and the strike price for a call is below the market price.

If you buy a strangle, you hope for a large price move in one direction or another that would allow you to sell one of the contracts at a significant profit. If you sell a strangle, you hope there's no significant price move in either direction so that the contracts expire out-of-the-money and you keep the premium you received.

References in periodicals archive ?
The highest prevalence of strangles was recorded in horses less than 2 years as compared to those having age more than 2 years.
1994) who reported that foals were highly susceptible to developing strangles following S.
Mrs Evans said there were too many myths linked to strangles.
Flint & Denbigh district commissioner Bethan Jones said strangles could be contained providing owners took sensible precautions.
Tim Morris, BHA Equine Science and Welfare director, said: "We have one confirmed case of strangles in Newmarket at present, but in accordance with our rules, the trainer reported the case very early and we are offering our support.
The last strangles scare to hit racing was five years ago when two cases were found at a livery yard near Epsom ten days before the Derby.
The AHT's work to develop and test a fully effective vaccine against strangles is ongoing.
An outbreak of strangles is rare within racing, but there was a case in the Lambourn area in 2000 in a horse imported from Ireland by Charles Egerton.
Having identified 60 regions where differences exist, they hope to learn how the strangles pathogen became, in Waller's words, "the black sheep of the family".
As we head into earnings season, the next few months will be ripe with opportunities for potential straddle or strangle positions.